Is Government funding a key to success?
Apr 28, 2016, 6:23 AM
So many people lobby for Government money but does it really help a business? Is Government funding a key to success?
The story of the railroads is an astonishing one. (Prager University has a piece on this included in the audio below.) The Government got so over their heads when the railroads were built and so much money was wasted because of the perverse incentives that were created. Instead of making the railroads go the shortest distances, they were diverted to cronies towns and depots.
When Government gets into a business, who is held responsible for the result? In a Venture Capital firm, there is someone in charge and responsible for the investment.
But there is no reason for Government to be in business because all of the incentives are reversed. The money that they “invest” comes to them by force.
And no one in D.C. actually has knowledge of business models. That shows in the solar bankruptcies because if anyone had looked into those companies they would have known that solar wasn’t anywhere where it needed to be to be commercial.
I hope Ted Cruz can get the Government to stop being investors because when they are they turn everything upside down.